North American Provision Co. v. Fischer Lime & Cement Co.

Hart, J., (after stating the facts). It is first sought to reverse the decree on the ground that the judgment obtained in the circuit court by the Fischer Lime & Cement Company was against Morris Packing Company, an Illinois corporation, and that, on this account, the Morris Packing Company, a Maine corporation, is not bound by the judgment. In that case the defendant was named as the Morris Packing Company, and the summons was served on the duly authorized agent of the Morris Packing Company. It is true that the complaint alleges that the defendant, M,orris Packing Company, was an Illinois corporation, but this did not make any difference. The defendant was sued as the Morris Packing Company, and the Morris Packing Company of Maine was the only corporation of that name doing business in Arkansas at the time. The service of summons was had upon its duly authorized agent. Thus it will be seen that the defendant had notice of the suit, and should have interposed any defense it might have had to the action, notwithstanding it was alleged to be an Illinois corporation, when in fact it was a Maine corporation. In the first place, it is immaterial in what State the defendant was organized as a- corporation. - It was sued and served as a foreign corporation, and the language of the- complaint apprised it of the nature of the action. Loose-Wiles Biscuit Co. v. Jolly, 152 Ark. 442. In the second place, Morris Packing Company had actual notice of the pendency of the suit against it in the circuit court, and does not even now claim that it had any meritorious defense to the action. In so far as the present record discloses, there was no defense whatever to the suit. In such cases, a meritorious defense must be shown in order to obtain the relief prayed for. Renfroe v. Parmelee, 143 Ark. 547, and McDonald Land Co. v. Shapleigh Hardware Co., 163 Ark. 524. Therefore the insistence of the defendant that the judgment in the circuit court against the Morris Packing Company was void because no service was had upon the defendant is of no avail to it in the present suit. It is conceded by the counsel for the defendant that no attempt was made to comply with our Bulk Sales law when the defendant purchased the stock of merchandise of the Morris Packing Company, and that the property so purchased by it exceeded in value the liabilities of said company. The sole reliance of counsel to reverse the decree on this ground is that the sale of its stock by a wholesale merchant does not come within the provisions of our Bulk Sales law. It will be remembered that the Morris Packing Company was engaged in selling at wholesale meat products and canned goods at Helena, Arkansas, when its stock of merchandise and other property was purchased by the defendant. It has been said that the practice of retail merchants in selling their stocks in bulk are the miost common source of fraud with which the courts have to deal, and that such statutes were passed for the protection of wholesale merchants. A sufficient answer to this is that wholesale merchants, by selling their stocks in bulk, could practice a fraud upon manufacturers and other wholesale merchants, who are their creditors, just as successfully as retail merchants could do in the sale of their stocks in bulk. After all, the language of the statute must be the test as to what class of merchants are embraced within its scope. It has been well said that, to determine the class of property included in Bulk Sales statutes, reference must be had to the language of the statute, which will be construed according to its common and ordinary meaning. Thus, in Connecticut Steam Brown Stone Co. v. Lewis (Conn.), 85 Atl. 534, 45 L. R. A. (N. S.) 495, it was held that a sale of his tools and stock in trade by one who buys stone in the rough and cuts and dresses it to fill orders is not within the Connecticut statute. The act under consideration in that case provides that, when any person who makes it his business to buy commodities and sell the same in small quantities for a profit shall, at a single transaction, sell or deliver the whole or a large part of his stock in trade, such sale shall be void against his creditors, unless the provisions of the act are complied with. The court held that the act in terms applies only to sales in bulk by persons who make it a business to buy and sell in small quantities the commodities which they have purchased. Other States make their statutes on the subject apply only to the sale in bulk by retail merchants of their stock of merchandise. . The language of our statute provides that the sale in bulk of any part of the whole of a stock or merchandise or merchandise and the fixtures pertaining to the conduct of any such business, otherwise than in the ordinary course of trade, shall be void as against the creditors of the seller, unless the terms of the act are complied with. Section 4870 of Orawf ord & Moses ’ Digest, and act 374 of the General Acts of 1923. See General Acts of 1923, p. 340. In this connection it may be stated that the only change made by the amendatory act is to prohibit the mortgage as well as the sale or transfer in bulk of the class of property embraced in the act without complying with the terms thereof. Now it will be seen that the language of the act in its common and usual acceptation includes wholesale and retail merchants alike. The language is sufficiently comprehensive to show that the object of the act was not only to protect wholesale merchants against fraudulent sales by retail merchants, but also to protect manufacturers and wholesale merchants against fraudulent sales by wholesale merchants. Grant v. Walsh (Wash. ), 78 Pac. 786; and Niklaus v. Lessenhop (Neb.), 157 N. W. 1019. It follows that the decree of the chancellor was correct, and must be affirmed.